Thursday, 13 October 2016

Remember how, not so
very long ago, the gamblers and speculators did their very best to wreck the
Euro in their greedy attempts to turn a few pennies? We were told often and bluntly at the time
that we should count our lucky stars that we hadn’t joined the Euro project,
and that it had been doomed to fail from the start.

Since the
referendum on June 23rd, those same gamblers and speculators have
seen a new chance to turn a few pennies by betting against the pound, and the
result has been to drive the value of sterling down. Strangely, those same people who told us when
this happened to the Euro that this showed what a disaster the Euro-zone was
now seem to be telling us how wonderful this is for the sterling zone.

Of course, the
situation is not identical, but there is one clear point of similarity, and
that is that the movements in currency aren’t being driven (despite what the
news reports regularly say) by ‘investors’ making their wisest guesses as to
what the future holds, but by gamblers and speculators who allow their
computers to trade autonomously in pursuit of very narrow margins by repeatedly
buying and selling the same things. It’s
a complete distortion of what ‘markets’ are supposed to be about, namely fixing
the price at a level acceptable to both those who want to buy a product and
those who want to sell it. It’s
gambling, pure and simple – and like all gambles, there are losers as well as
winners.

And, just as
with the problems of the Euro-zone, there’s no need to guess who the losers are.